Budget: Realty sector wants tax reliefs

February 18, 2010 14:38 IST

With the Budget just a little over a week away, the Indian realty sector has lined up its wish-list which include a tax holiday under Section 80-1B for affordable housing, promoting real estate mutual funds and clarity on introduction of a real estate regulator, among others.

With a strong push now being given to affordable housing, 'a tax holiday under Section 80-1B for affordable housing should be given for units below 1,200 sq ft,' Marathon Group's manging director Mayur Shah said.

A specific tax incentive and rationalisation of stamp-duty registration charges would lead to further investments in affordable housing projects, Lodha Developers' managing director, Abhisheck Lodha, said.

The industry also called for an upward revision to tax exemption to the extent of Rs 300,000 on housing loan interest payment.

"An upward revision to the extent of Rs three lakh compared to Rs 1,50,000 available now on housing loan interest payment under Section 24 (b) of the IT Act will help boost demand for residential units," Sahara Prime City's CEO, Sushanto Roy, said.

He also called for a tax holiday for hotels under Section 80 1D to be extended to 10 years from the present five-years, in view of the long gestation period for the industry.

Promoting real estate mutual funds is also high on the industry's wish-list with Man Infraprojects' director, Nikhil Mansukhani, saying 'promoting real estate mutual funds and bringing flexibility in foreign direct investment norms could be good alternatives to address the issue of capital funding requirements for high-end projects.'

Rental income from commercial premises should be freed from service taxes, Marathon's Shah said, while Sahara's Roy called for an uniformity in stamp duty rates on property transactions across all states.

"We have been demanding reduction in stamp duty to four to five per cent for long; now, we are expecting uniformity in stamp duty rates, industry body Maharashtra Chamber of Housing Industry's president, Pravin Doshi, said.

The introduction of a real estate regulator was raised by Lodha, who said that such a move would result in higher levels of transparency.

"This regulator may not necessarily decide on rates, but should put down firm principles in terms of property dealings and also quality parameters in terms of rating or constructions," he said.

The regulator should serve as a platform, wherein, if developers have issues with local bodies, the regulator should assist the industry in addressing these issues, Sahara's Roy said.